Rajkumar Shamdas Aswani, Pune V. Assistant Commissioner of Income-tax, Central Circle -2 (2), Pune

ITSSA 24/PUN/2019

AI Insights

The case involves Rajkumar Shamdas Aswani, who appealed against the order of the CIT(A)-12, Pune, which upheld the Assessing Officer's addition of notional rental income of Rs.1,26,000 for the Assessment Year 2015-16. The dispute centered on the correct method of calculating the annual value of a residential property for tax purposes. The Assessing Officer had adopted a notional rent of Rs.15,000 per month, while the appellant argued for a municipal valuation of Rs.1,296 per annum, citing a precedent from the Mumbai Tribunal. The Tribunal, referencing similar cases, ruled in favor of the appellant, accepting the municipal valuation and rejecting the notional rent assessment.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 128661 (ITAT-PUNE)
• Duration Of Justice: 1 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 22-11-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 10-10-2022
• Assessment Year: misc
• Appeal Filed On: 21-11-2022
• Other Referred Cases: Smt Munira N. Chudasma vs. ACIT, Arihant Patni vs. ITO
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 143(3); 153A

Judgement Text

आयकर अपीलीय अधधकरण “बी” न्यायपीठ पुणे में । IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, PUNE BEFORE SHRI S.S.GODARA, JM AND SHRI DR. DIPAK P. RIPOTE, AM आयकर अपील सं./ IT(SS)A No.24/PUN/2019 धनधाारण वषा / Assessment Year : 2015-16 Rajkumar Shamdas Aswani, S.P.Heights, Near Hotel New Sher-E-Punjab, Kasarwadi, Pune -411 034 PAN : AEZPA 7340 C .......अपीलाथी / Appellant बनाम / V/s. ACIT, Central Circle-2(2), Pune ......प्रत्यथी /Respondent Assessee by : None Revenue by : Shri Sardar Singh Meena सुनवाई की तारीख / Date of Hearing : 11.10.2022 घोषणा की तारीख / Date of Pronouncement : 23.11.2022 आदेश / ORDER PER S. S. GODARA, JM : 1. This assessee’s appeal for AY 2015-16 arises against the CIT(A)-12, Pune’s order dated 30/01/2019, passed in case No. PN/CIT(A)- 12/10386/2017-18, involving proceedings u/s 143(3) r.w.s. 153A of the Income Tax Act, 1961; in short "the Act”. 2 IT(SS)A No.24/PUN/2019, A.Y. : 2015-16 Rajkumar Shamdas Aswani, Case called twice. None appears at assessee’s behest. He is accordingly proceeded ex-parte. 2. Ld. CIT-DR pointed out at the outset that the assessee sole substantive grievance raised in the instant appeal challenges correctness of both the learned lower authorities’ action adopting notional rental value of his flat no.4 at Nana Chambers, Kasarwadi at Rs.1,26,000/- which has been upheld in the CIT(A)’s order as follows :- “3.2 1 have considered the materials placed before me. Brief facts are that the appellant was staying in a bunglow at Pimpri. The AO found out that the appellant also own a flat at Flat no. 4 Nana Chambers, Kasarwadi admeasuring 684.65 sq ft. purchased on 26.12.1997. The appellant in the return of income filed had not offered any rental income from the said flat. The AO calculated notional rent at the rate of Rs.15,000/- per month and added the same to the total income after allowing standard deduction u/s 24(a) at 30%. During the appellate proceedings the appellant contended that the AO calculated monthly rent at presumptive basis. The appellant claimed that in case of vacant flat net annual value for calculation of income from house property should be taken at municipal valuation which was claimed to be Rs. 1296 per annum. The appellant relied on the decision of Hon’ble Mumbai Tribunal in the case of Smt Munira N. Chudasma vs. ACIT(ITA no. 3027/MUM/2011 for AY 2005-06) dated 31.05.2012. I have carefully considered the submission filed by the appellant. The contention of the appellant of only considering the municipal valuation for determination of Gross Annual Value for calculating income from house property cannot be accepted since section 23 of the IT Act does not allow such discretion. The Annual Value has to be calculated as per the provisions mandated in section 23. As per sec 23(1)(a), the annual letting out value of any 3 IT(SS)A No.24/PUN/2019, A.Y. : 2015-16 Rajkumar Shamdas Aswani, property is “the sum for which the property might reasonably be expected to let from year to year”. In the present case, the property in question is a flat in a posh locality. The municipal valuation of the property submitted by the appellant is only Rs. 1296/- per annum which is exceptionally low considering the proximity of the property with the city and the present economic scenario. Therefore, the contention that gross annual value of the property is only Rs. 1296/-, cannot be accepted. The annual letting out value estimated by the AO is quite reasonable. I find no infirmity with the addition made by the AO. Ground raised by the appellant is hereby dismissed.” 3. We have given our thoughtful consideration to assessee’s pleading and Revenue’s vehement arguments in support of the irrespective stands. Suffice to say, it has already come on record that the assessee had adopted municipal valuation for the purpose of declaring house property income of the concerned asset at the rate of Rs.1296/- per annum. This tribunal’s coordinate bench decision in Munira Chudasama (supra) has already rejected the Revenue’s identical stand going against such a municipal letting value. This tribunal’s recent coordinate bench decision in ITA Nos.2695/PUN/2016 Arihant Patni vs. ITO and bunch of appeals decided on 07.06.2022 has also reiterated the very legal proposition. We therefore delete the impugned notional rental income addition of Rs.1,26,000/- in the given facts and circumstances of the case. The assessee succeeds in his sole substantive grievance. 4 IT(SS)A No.24/PUN/2019, A.Y. : 2015-16 Rajkumar Shamdas Aswani, 4. This assessee’s appeal is allowed in above terms. Order pronounced in the Open Court on this 23 rd day of November, 2022. Sd/- Sd/- (DR.DIPAK P.RIPOTE) (S.S. GODARA) लेखा सदस्य/ ACCOUNTANT MEMBER न्याधयक सदस्य/JUDICIAL MEMBER पुणे / Pune; ददनांक / Dated : 23 rd November, 2022. SujeetAshwini आदेश की प्रधतधलधप अग्रेधषत / Copy of the Order forwarded to : 1. अपीलाथी / The Appellant. 2. प्रत्यथी / The Respondent. 3. The CIT(A)-12, Pune. 4. The Pr.CIT, Central, Pune. 5. धवभागीय प्रधतधनधध, आयकर अपीलीय अधधकरण, “बी” बेंच, पुणे / DR, ITAT, “B” Bench, Pune. 6. गार्ा फ़ाइल / Guard File. आदेशानुसार / BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अधधकरण, पुणे / ITAT, Pune. 5 IT(SS)A No.24/PUN/2019, A.Y. : 2015-16 Rajkumar Shamdas Aswani, S.No. Details Date Initials 1 Draft dictated on 13.10.2022 2 Draft placed before author 18.11.2022 3 Draft proposed & placed before the Second Member 4 Draft discussed/approved by Second Member 5 Approved Draft comes to the Sr. PS/PS 6 Kept for pronouncement on 7 Date of uploading of Order 8 File sent to Bench Clerk 9 Date on which the file goes to the Head Clerk 10 Date on which file goes to the A.R. 11 Date of Dispatch of order